Investment Firms Increase Macy’s Takeover Offer to $6.6 Billion

Arkhouse Management, a real estate-focused investing firm, alongside Brigade Capital Management announced on Sunday a revised offer to acquire Macy’s. Previously snubbed for being too low, the firms now propose purchasing Macy’s shares they don’t already own for $24 each, a 14% increase from their previous bid of $21 per share.

This new offer, amounting to $6.6 billion, presents a premium of approximately 33% over Macy’s closing price of $18.01 on Friday.

In a statement about the proposal, Arkhouse said, “We continue to offer the company an attractive alternative solution through a sale of the company at a substantial premium. This would provide Macy’s stockholders with significant value and immediate liquidity.”

Macy’s responded in a separate statement, indicating the company’s intent to thoroughly assess the latest proposition.

Last December, the investment firms initially offered $21 per share to acquire Macy’s outstanding shares, only to have their bid dismissed due to concerns regarding financing and valuation by the department store operator.

Macy’s, like many traditional department stores, has encountered challenges competing with younger online rivals and smaller brick-and-mortar competitors. This predicament has provided Arkhouse and Brigade with an opportunity to push for Macy’s exploration of a sale.

Additionally, Arkhouse Management has posed a board challenge to Macy’s by nominating nine director candidates, including individuals with expertise in retail, real estate, and capital markets, to the department store’s 14-member board in the previous month.

Last week, Macy’s announced plans to close 150 of its main stores over the next three years in a broader restructuring effort aimed at securing its relevance in today’s market. The company will close the first 50 stores by the end of fiscal 2024. In a statement about the changes, CEO Tony Spring said, “We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value.”